Health Protection/Promotion for the Workforce: The Business Case

We all feel the hurt when employee health is not addressed.

By Robert Eric Dinenberg

Nov 01, 2013

Workplace injuries have an immense financial toll on employers with an annual impact in the billions of dollars. Approximately 9.1 million American workers had workplace-related injuries and illnesses in 2007, with a cost of $250 billion.1 The National Safety Council has estimated on-the-job injuries cost the United States more than $130 billion annually.2 Of this figure, medical and administrative costs total $46 billion and wage and productivity losses are an astounding $68 billion.

In addition to the increasing health care cost of occupational injuries and preventable chronic conditions, employers are beginning to understand the significant productivity-cost impact related to poor health of employees and workplace injuries that can result in employee downtime and worker’s compensation costs. Research is now starting to show a greater correlation between employee health and workplace productivity than was previously realized. By reducing workplace injuries, employers can reduce worker's comp claims, achieve greater cost savings, and maintain a higher level of worker productivity.

It is reasonable to understand that many employers may question the return on investment of developing, implementing, and managing integrated work site health and disability prevention programs for employees. However, employers face a greater financial risk when failing to prevent workplace-related disabilities and injuries that will cost more in the long run. The fact that many work-related injuries and disabilities are preventable should be enough to shift the way many employers view the investment to develop and implement a comprehensive disability prevention strategy.

The Dow Chemical Company Story
Dr. Ron Goetzel, director of the Emory University Institute for Health and Productivity Studies and vice president of consulting and applied research for Truven Health Analytics, is a recognized expert in health and productivity management, program evaluation, and outcomes research. His studies focus on health promotion evaluation, disease prevention and management programs, and the correlation between well-being and overall health and work-related productivity.

Goetzel's research on The Dow Chemical Company (Dow) points to a model that would keep employees healthy while saving money for employers. He estimated Dow potentially could reap an astounding 300 percent return on investment if it managed just a 1 percent risk factor improvement. Even with such a small level of improvement, it was determined that Dow would achieve a total savings of $50 million over the course of five years.3

With a formal health promotion program in place for more than 25 years, Dow has been successful in establishing a culture of health and focuses strongly on prevention and addressing chronic disease risk factors, such as physical inactivity, obesity, and tobacco use among its employees. Achievements that Dow has realized include:

Employees reducing their risk of chronic disease by 15 percent between 2004 and 20084

Saving more than $100 million in U.S. health care costs between 2004 and 20105

A recent National Institutes of Health publication by Goetzel titled "Second-Year Results of an Obesity Prevention Program at The Dow Chemical Company"6 allows for a "look under the hood" at the health promotion practices at Dow. Dow's standard health promotion programs that are individually focused are listed as:

In this recent NIH study Goetzel led, all participants had access to the above list of individually focused interventions, and a select group of participants also had access to additional environmentally focused resources, such as:

1. Environmental prompts that encourage healthy food choices and being physically active
2. Point-of-choice messages to encourage healthy food choices and being physically active
3. Modifying vending machine items and cafeteria menus
4. Creating and promoting the use of walking paths
5. Disseminating messages that encourage healthy eating and being physically active
6. Making available an online weight tracking program
7. Establishing wellness ambassadors at local departments
8. Developing an employee recognition program for employees who adopt healthy lifestyles
9. Setting health objectives as a component of management goals
10. Providing management training on health-related topics
11. Sharing reports to senior leaders on achievement of program participation targets
12. Providing additional support and training to the wellness ambassadors

The study concludes that, in addition to individual interventions, environmental interventions can support weight management and risk reduction after two years. This conclusion fits with current thought that interventions that blend individual approaches with environmental strategies will produce greater effects than individual approaches alone.

The Cost of Occupational Injuries
Workplace injuries and illnesses have a major impact on an employer's bottom line. OSHA estimates employers pay almost $1 billion per week for direct worker's compensation costs alone.7 The cost of workplace injuries and illnesses include both direct and indirect costs. Direct costs include worker's comp payments, medical expenses, and costs for legal services. Examples of indirect costs include training replacement employees, accident investigation and implementation of corrective measures, lost productivity, repairs of damaged equipment and property, and costs associated with lower employee morale and absenteeism.

OSHA's $afety Pays Program8, a resource that provides background on the costs of workplace injuries and illnesses, helps employers assess the impact of occupational injuries and illnesses on their profitability. It uses an employer's profit margin, the average costs of an injury or illness, and an indirect cost multiplier to project the amount of sales a company would need to generate to cover those costs.

An Integrated Approach
It stands to reason that workplace environmental interventions such as offering healthier food choices in cafeterias or promoting staircase use can have a positive mass effect on all employees--just as installing hand rails on all staircases can have a mass effect to keep employees safe from falls. And why not do both? Indeed, research shows that programs that provide both workplace health promotion and occupational safety and health may be more effective than programs that provide health promotion alone.

Interventions such as work site health promotion, health and safety protection, and disability prevention also can reduce comp costs. Navistar, a manufacturer of heavy trucks and mid-range diesel engines headquartered in Lisle, Ill., achieved substantial gains in both overall health and safety results. The manufacturer's injury incidence frequency rate dropped to 455 injuries in 2009, as compared to 2,446 injuries in 1998.9 In addition, both Navistar's worker's comp costs and hospital admission rate per employee dropped, and the company achieved a 48 percent decrease in controllable absences from workplace injuries and illnesses.

NIOSH's Total Worker Health™ is a strategy that integrates occupational safety and health protection with health promotion to prevent worker injury and illness and to advance health and well-being. NIOSH Total Worker Health recognizes that in the past, the compartmentalization of health protection programs that focused on safety were in one silo and workplace health promotion programs that focused on lifestyle factors operated in another silo. Research coming from NIOSH Total Worker Health supports the effectiveness of combining these efforts through workplace interventions that integrate health protection and health promotion programs.

Health care spending is now at more than $2.5 trillion10, and employers on average pay more than a third of this cost. Employers need to improve employee health and prevent work-related injuries, illnesses, and disabilities in order to reduce preventable health care expenditures and protect their bottom line. Employers that maintain a healthy and safe workforce can achieve greater cost savings and remain competitive. Employers who ignore the health of their employees face financial consequences and are at a tremendous disadvantage in the race of industry.

Conclusion
We all feel the hurt when employee health is not addressed. Employees suffer with disease and disability, and employers suffer financially. A growing body of science shows us the way forward: We can provide not just individually focused health promotion programs, but also both individually focused and environmentally focused health promotion programs. Such programs will work better when health improvement goals align with the organization’s overall mission and when senior leaders buy in to the process. When such health promotion programs are integrated with health protection programs, overall effectiveness can be optimized, improving the lives of workers and their families and safeguarding the financial health of the employer. Multiply this action across many of the companies and organizations of the country, and it becomes clear how important a healthy workforce is to a strong and prosperous nation.